Mohawk Valley Water Authority – January 21, 2014


Chairman DeLia called the meeting to order at 5:40 PM and opened with the Pledge of Allegiance.


Roll Call:  Present: Rocco Arcuri, Dennis Bova, Bruce Brodsky, Elis DeLia, Mitch Ford, Frank Mutolo and Steve Zywiak.  Absent: Vincent Coyne, Mark Ford, Scott Mahardy, Bette Szesny and Scott Williams.  Also Present: Connie Schreppel, Dick Goodney, Mario Bequer, Jim Korfonta, Scott Gorgas and Ken Bobrow.


Chairman DeLia presided and Suzanne Harmon took the minutes.


Approval of the December 16, 2013 Minutes

Motion made by Mr. Bova to approve the minutes.     Seconded by: Mr. Brodsky.

Vote:  (7) Ayes   (0) Nays   (0) Abstain   (5) Absent      Motion Carried.


Approval of the MVWA Fiscal 2014-2015 Proposed Budget

Mr. Korfonta handed out the MVWA Fiscal Year 2014-15 Proposed Budget highlights.  The proposed budget requires a 2.9% increase in water rates to fund a $22 million budget for FY 2014-2015.  The main reasons for the increase are: 

1)A reduction in overall water system consumption of approximately 4.0%; 2) Employee benefit increases including: retirement premiums increasing $61,000; health insurance premiums increasing $89,000 or 6.2%; worker’s compensation premium increasing 43%, 3) Additional principal payments due on the 2012 revenue bonds of $150,000 and 4) Offsetting these increases is an overall reduction in operating expenses in other areas resulting in an overall budgeted expense reduction of .75% on the $22 million budget.  The overall effect on rates is 2.9%.  This consists of a reduction in expenses of (1.1) %; net consumption reduction for the current year of 2.0%; and a new consumption reduction proposed on the next year of 2.0%.


Mr. Brodsky stated that the MVWA has budgeted a carryover for the past several years and has been fortunate that it has never been used. This year the funding of the Capital Maintenance Reserve (line 25) has been budgeted at $750,000.  Projecting to year end, there will not be adequate funds to fund the entire amount.  Current projections will allow only $385,000.


The MVWA currently budgets for a deficit of 4.0% or $746,000 (line 5) as part of balancing the overall budget.  In the 2014-15 budget, this deficit funding has increased to $795,000.


Mr. Brodsky sees a 2% increase as a philosophical investment in our community. 


Mr. Arcuri doesn’t’ think a difference of .9% will impact the individual homeowner. He stated that the MVWA will need to replenish what has been taken from the carryover balance in the future.


Chairman DeLia thinks the Board should be talking about a 5.9% rate increase, to be realistic, so a 2.9% increase is already a compromise.


Mr. Becher stated that the MVWA rate consultant said a 2.9% rate increase meets our debt coverage ratio that is required in the bonding and a 2.0% increase also meets that coverage.  His bigger concern is

whether or not the MVWA is depleting the cash reserves and lowering our balance moving forward.  That is a major concern and thinks it could be viewed as unfavorable by rating agencies.


Mr. Arcuri made a motion to approve the budget as presented and a rate increase of 2.9%.   

Seconded by: Mr. Zywiak.

Vote:  (3) Ayes   (4) Nays   (0) Abstain   (5) Absent      Motion not approved.


Mr. Brodsky made a motion to amend the budget by reducing the rates by .9% and moving funds from the operating budget to the capital bonding, which would result in a 2% rate increase. 

Seconded by:  Mr. Ford.

Vote:  (4) Ayes   (3) Nays   (0) Abstain   (5) Absent      Motion not approved.


Chairman DeLia will be calling a Special Board meeting.


Approval: Quarterly Investment Statement – 2nd Quarter Ending September 30, 2013

Mr. Korfonta stated that this is an investment statement of the MVWA trust funds.  The Board has been presented with these statements every quarter for approval.

Moved by:  Mr. Brodsky.     Seconded by: Mr. Zywiak.

Vote:  (7) Ayes   (0) Nays   (0) Abstain   (5) Absent            Motion Carried.


Discussion:  Authority Bonding Limit

Chairman DeLia stated that this will be discussed at a later date.


Amendment to the Rules and Regulations Pertaining to Abandonment of Services (2 inches and larger)

Mr. Goodney stated that the Engineering staff has prepared a new section for the Rules and Regulations that address the inactivation of these types of services.  Inactivation will be an option instead of physically disconnecting the service from the supply main as is current practice.  This approach also eliminates any associated charges unless and until the service is reactivated.  The reactivation procedure is also detailed.  (See Attached)

Moved by:  Mr. Brodsky.    Seconded by: Mr. Mutolo.

Vote:  (7) Ayes   (0) Nays   (0) Abstain   (5) Absent            Motion Carried.


Committee Reports:.

Finance:  Mr. Korfonta stated that he did not provide the Board with a monthly report and will have an update at the next Board meeting.  Consumption is level for now and cash flow is as projected.


Mr. Brodsky would like the Board to receive a projection on the cost of credit card and billing charges that are currently being absorbed in the MVWA budget.  Based on the history, project it out over five years.   The Board needs to decide whether it’s a charge on the customer in the future or how long does the MVWA absorb it. 

Chairman DeLia would like that to go through the Finance Committee and bring a recommendation back to the Board. 


Executive Director’s Report

         The MVWA recently lost an employee, Frank DeRocco who worked in the IT department for 38 years.  Our thoughts and prayers go out to his family.

         Mr. Becher had an updated copy of the MVWA Emergency Response Plan.  He thanked Dick Goodney and Connie Schreppel, along with their staff on a job well done.  The MVWA customers should know that the MVWA is well versed in a variety of emergency situations.

         Discussions have been going on regarding a regional approach for the western side of Oneida County.  The MVWA had applied for a grant, at the state level that the MVWA received.  The first meeting was held last week in Sherrill.  The group is ready to put an RFP out which will come back to the MVWA Board.  The MVWA will be responsible for procuring services under this grant. A recommendation on how to go about hiring the engineering consultants to conduct the study will come to the Board in a few months.

         There may be a way to pass the budget and negate the need for a special meeting.  The Board could pass the budget as presented.  The establishment of water rates could be either 1) support the rate structure as proposed or 2) pass the rate structure at 2%, which would amend the budget.  We would reimburse through the bond proceeds instead of reducing the expenditures.  



Old Business:

Approval of the MVWA Fiscal 2014-2015 Proposed Budget

Chairman DeLia suggested supporting a proposed budget as is.  If the water rate increase changes to 2% then the Board could amend the budget. 


Mr. Brodsky will move the Budget as presented.  Seconded by:  Mr. Bova.

Vote:  (7) Ayes   (0) Nays   (0) Abstain   (5) Absent            Motion Carried.


Mr. Becher stated that there was a question raised at the last meeting by Mr. Bova relating to entering homes for frozen water services.  Mr. Becher would like advice from counsel in a closed session. 

Mr. Bobrow stated that it would be in a closed session because it is attorney client privilege.


New Business:

Mr. Brodsky stated that he has asked many times in the past for two proposals that should go on a future agenda. 

1)      A proposal to secure consulting services with the development of water bottling at the MVWA filtration plant.

2)     There was a discussion at the Capital Projects Committee meeting a while back regarding making improvements to existing facilities or should the MVWA develop plans to expand and/ or move to new facilities.  Mr. Brodsky would like to update the MVWA facilities program plan for the future.  Chairman DeLia will send that over to the Capital Projects Committee under the five/ten year plans.


Chairman DeLia stated that Ken Bobrow, Esq. will give the Board his opinion under Old Business then the issue will go to the Operations Committee.  Then it will come back to the Board for consideration in light of this legal opinion.  The meeting will be adjourned and then the Board will go into closed session.  There can be no discussion in the closed session just an opinion from counsel.    


Chairman DeLia adjourned the meeting at 6:45 PM.


Respectfully submitted,



Suzanne M. Harmon, Secretary 

Mohawk Valley Water Authority